As we prepare to enter a new year, I want to share some of the great work accomplished by the PUCO during 2021 and look forward to the opportunities and challenges 2022 will bring.
The PUCO is charged with balancing the interests of a wide range of stakeholders. Indeed, our mission is to assure all residential and business consumers access to adequate, safe and reliable utility services at fair prices, while facilitating an environment that provides competitive choices.
Safety is of course at the forefront of this mission. From natural gas pipeline operators and electric utilities, to commercial trucks and trains, the PUCO enforces important state and federal safety standards. When violations occur, the PUCO will take enforcement action which includes ordering corrective action and monetary fines.
Ensuring access to vital utility service is especially important as Ohioans continue to cope with the pandemic. The PUCO’s own special winter reconnect order and newly improved low-income assistance programs will assist customers this winter heating season and year-round. Monitoring consumer protections in Ohio’s competitive energy markets also continued throughout 2021.
As we look ahead to 2022, this great work outlined below will continue. There is much work to be done, but I know the agency and my fellow commissioners are up to the challenge.
PUCO Call Center assisting utility customers
Throughout 2021, the PUCO Call Center received nearly 53,000 calls, emails, and letters, from utility consumers. Many of these consumers have a question a representative can quickly handle. In other instances, issues require a closer examination. At that point, a PUCO investigator is assigned to look into the matter. PUCO Call Center staff performed 11,679 investigations into customer complaints. In 2021, the PUCO Call Center saved Ohio consumers more than $750,000 through its investigations.
PUCO orders competitive supplier PALMco (dba Indra Energy) to refund customers
This fall the PUCO continued enforcing important consumer protections in Ohio’s competitive retail energy markets.
Under the terms of the agreement, PALMco will refund customers whose rates increased by more than 50% from August – December 2019, totaling more than $215,000. PALMco will also waive uncollected bills of approximately $832,000. Any remaining balances after PALMco issues refunds will be donated to a charity chosen by the Ohio Consumers’ Counsel (OCC).
PALMco’s current owners, officers or partners are barred from doing business in Ohio’s retail energy markets for seven years by the terms of the agreement.
FirstEnergy’s Ohio utilities to refund customers $306 million
In November, the PUCO ordered FirstEnergy’s three Ohio utilities, Cleveland Electric Illuminating Company, Ohio Edison and Toledo Edison, to issue refunds totaling $306 million.
The settlement agreement resolves 10 pending regulatory proceedings related to 2017-2020 annual earnings tests, a 4-year review of FirstEnergy’s electric security plan, and 2014-2018 energy efficiency audits.
Specifically, the agreement calls for the utilities to refund $96 million (which includes interest) related to the utilities’ 2017-2019 annual earnings tests. Residential customers would receive a one-time bill credit of approximately $27. Nonresidential customers would be provided approximately $2.60 per megawatt hour credit over a six-month period.
The remaining $210 million would be refunded as a monthly bill credit as follows:
$80 million during 2022
$60 million during 2023
$45 million during 2024
$25 million during 2025
The agreement maintains the terms and conditions of its previously approved electric security plan, including FirstEnergy’s commitment to file a base distribution rate case by May 31, 2024.
PUCO orders FirstEnergy to return “decoupling revenues” to customers
In July, the PUCO ordered FirstEnergy’s Ohio utilities to refund approximately $27.5 million that was collected from customers during 2020 related to “decoupling”. Customers received a one-time refund on their August utility bills.
Amended Substitute House Bill 128 became effective on June 30, 2021. Among other things, the law requires a full refund of any revenues collected in the form of a decoupling charge established under R.C. 4928.471. The three FirstEnergy utilities collected this decoupling charge from customers from Jan. 1, 2020 through Feb. 2, 2021. No other Ohio electric distribution utilities had this type of decoupling charge.
FirstEnergy/House Bill 6 investigations continue
Four PUCO investigations are currently ongoing in response to the criminal investigation brought by the U.S. Department of Justice surrounding the passage of Amended Substitute House Bill 6 during the 133rd General Assembly.
A review is focused on political and charitable expenses and aims to determine to what extent, if any, were included, directly or indirectly, in any rates or charges paid by customers.
A corporate separation audit was filed in September 2021. This case examines FirstEnergy Corp.’s compliance with Ohio’s corporate separation laws and rules, which are designed to ensure that no undue preference or competitive advantage is provided to an affiliate by an electric distribution utility.
Two audits focus on rates paid by FirstEnergy’s Ohio utility customers. An audit report filed in August recommended refunding more than $6 million that lacked supporting documentation, as well as excluding almost $7 million for future rate calculations. Another audit of FirstEnergy’s distribution modernization rider is due January 2022.
The PUCO is aware of many other investigations, inquiries, or litigation currently underway by or before various federal or state government or regulatory agencies regarding matters outside the jurisdiction of the PUCO.
The Commission has stated “[while we are] aware of reports containing allegations against FirstEnergy Corp. regarding its conduct in the passage of HB 6 and the subsequent referendum, we are determined to act in a deliberate manner, based upon facts rather than speculation, and with due consideration to the limits on our statutory authority over FirstEnergy Corp. and over the political and charitable activity of all public utilities in this state.”
AEP Ohio implements new rate structure
This December, the PUCO approved a settlement establishing new rates for AEP Ohio. The agreement includes reductions in base rates, reductions in rider costs and pilot programs for EVs and renewable generation, and ties spending limits to performance-based electric reliability metrics.
AEP Ohio will offer an electric vehicle charging rate through a new pilot program. Customers will be able to take advantage of time-of-use rates or avoid paying demand related charges for their EVs!
PUCO special reconnect order helps Ohioans stay warm this winter heating season
For more than 30 years, the PUCO’s special reconnect order has allowed any residential customer of a PUCO-regulated electric or natural gas company avoid a service disconnection for nonpayment. Last winter heating season, more than 181,200 Ohioans used the Winter Reconnect Order.
Under the Winter Reconnect Order, customers must pay the utility no more than $175 plus any applicable reconnection charge which cannot exceed $36. If the utility’s reconnect charge is greater than $36, the balance above $36 may be charged to the customer on the customer’s next monthly bill.
Low-income assistance Percentage of Income Payment Plan changes
In November, changes to the state of Ohio’s Percentage of Income Payment Plan took effect. The PUCO and Ohio Department of Development are each responsible for reviewing chapters of the Ohio Administrative Code that govern the PIPP program from natural gas and electric customers.
Program rules were updated to align the chapters of administrative code covering natural gas and electricity. Notable among the changes is lowering the required payment of customers enrolled in the program. Eligible customers pay five percent of their monthly gross household income towards their utility bills. So long as these monthly payments are on time and in full, remaining balances towards the customer’s utility bill can be forgiven.
SOBE Thermal Energy takes over Youngstown Thermal
The PUCO’s 4-year+ stewardship of the near-bankrupt Youngstown Thermal heating and cooling utility took a major step forward when the PUCO approved the transfer of assets to a new owner this November.
In 2017 Youngstown Thermal was placed into a court-appointed receivership at the PUCO’s urging. At the time, the utility was insolvent and unable to meet its obligation to provide safe and adequate utility services to its customers in downtown Youngstown.
SOBE Thermal has made significant capital and operation improvements to improve utility service and operations.
Holding unsafe gas pipeline operators accountable
The PUCO enforces state and federal natural gas pipeline safety regulations. When suspected violations occur, PUCO investigators examine utility operations and procedures.
Columbia Gas of Ohio was cited by the Commission for two separate incidents in which major property damage and non-life-threatening injuries occurred in Kitts Hill and South Point, Ohio. The utility was ordered to pay two separate $250,000 civil forfeitures and provide regular updates to the PUCO on improvements to their operations and procedures.
In March, Foraker Gas was cited by the Commission for not properly conducting important leak surveys throughout its pipeline systems. Leak surveys are a crucial tool for pipeline operators to monitor the health and safety of the gas pipeline system.
More Ohio utilities modernizing electric grid
Ohio’s utilities will continue deploying new technologies aimed at improving electric reliability, data sharing, and communications between the utilities, its customers and competitive energy suppliers. The PUCO monitors these programs to ensure operational savings realized by the utilities are credited to customers and sets limits on how much utilities can charge to customers for these investments.
In June, the PUCO authorized AES Ohio to begin its deployment of “smart grid” technologies. The utility will invest up to $267 million to install smart meters and automation equipment. AES Ohio will also provide funding for smart thermostat and electric vehicle charging station rebates. READ MORE
In December, AEP Ohio received PUCO approval to go ahead with the $332 million third phase of its gridSMART plan. This will include 475,000 new smart meters. Upon completion of this rollout, nearly all AEP Ohio customers will have a smart meter. READ MORE
Hazmat grants awarded to Ohio schools and local governments
Each year, the PUCO awards up to $800,000 in grants to educational institutions and local governments to conduct hazardous materials training for Ohio’s first responders. Money for these grants comes from civil forfeitures assessed on hazardous materials carriers by the PUCO. The PUCO awarded 12 hazmat grants in August. READ MORE
Keeping Ohio’s highways safe
The PUCO serves as the lead agency for the Motor Carrier Safety Assistance Program and in this capacity partners with the Ohio State Highway Patrol (OSHP) to ensure that commercial motor vehicles are safely traveling throughout Ohio.
PUCO and OSHP inspectors conducted more than 65,802 driver/vehicle inspections during 2021. Each inspection follows a thorough process to ensure that the driver and vehicle meet necessary state and federal regulations. Vehicles, drivers and companies that fail to meet these regulations may be declared out-of-service and cannot continue operating until they comply. Additionally, the PUCO conducted 449 motor carrier and shipper compliance reviews to ensure proper state and federal safety and hazardous materials regulations were followed.
PUCO staff conducted a record number 1,681 new entrant safety audits this year to help them understand and comply with applicable safety and hazardous materials regulations.
When violations of important safety standards are found, they can lead to civil forfeitures (monetary fines) for drivers and trucking companies. Motor carrier inspectors issued 37,821 citations totaling $4,987,785.85. Civil forfeitures collected fund the PUCO’s hazmat grants and are also contributed to the state of Ohio’s General Revenue Fund.
The PUCO ordered a total of 62 rail crossing safety upgrades during 2021, including the installation of lights and gates, supplemental assistance upgrades and circuitry upgrades. These upgrades are funded through federal, state and local monies. The rail division regularly conducts rail and safety inspections at Ohio’s more than 5,700 public roadway/rail grade crossings.
Utility-scale solar permit applications
The Ohio Power Siting Board is responsible for siting large scale electric generation facilities. During 2021, 18 new solar facilities were certified by the OPSB to begin construction.
In October, Senate Bill 52 took effect. SB 52 revises the OPSB’s certification process to provide local governments more flexibility to impact the siting process. The PUCO and OPSB expanded outreach to local government officials to assist and educate local officials about the OPSB process and how they can be involved.
PUCO advocates on behalf of Ohio consumers at FERC
PUCO commissioners and the PUCO’s Office of the Federal Energy Advocate both participate in proceedings before federal regulators, such as the Federal Energy Regulatory Commission (FERC). During 2021, PUCO advocated for protections to PJM’s wholesale markets, and natural gas transmission rate cases before FERC.
Looking ahead to 2022
The next year has no shortage of important work to do. My fellow commissioners and I are excited to host a series of energy efficiency discussions this March and April.
Base distribution rate cases are currently pending: Duke Energy Ohio (electricity), Columbia Gas of Ohio, and AES Ohio. Each of these cases are examining the utilities' annual revenues and will impact customers’ monthly bills.
Administrative rules will continue to be updated to meet our 5-year rule review obligations, as well as other regulator restriction reduction requirements. For instance, OPSB rules.